Foreign Aid: Who Benefits?

NOVANEWS

Foreign “aid” often benefits NGOs of the donor country as well as the local business elites in the recipient country.  The Council on Hemispheric Affairs has blamed both Bill Clinton as well previous U.S. presidents for having maintained  Haiti in conditions of “endemic poverty through a self-serving U.S. rice export policy […] By 2003, approximately 80% of all rice consumed inHaiti was imported from the United States.” (Leah Chavla, Bill Clinton’s Heavy Hand on Haiti’s Vulnerable Agricultural Economy: The American Rice Scandal, Council on Hemispheric Affairs,April 13, 2010.)

Last January iWatch News reported:

According to [U.S] government figures, 1,537 contracts had been awarded [to U.S. Companies] for a total of $204,604,670, as of last fall. Only 23 of the contracts went to Haitian companies, totaling $4,841,426. (Marjorie Valbrun, Haitian firms few and far between on reconstruction rosters, iWatch News, January 11, 2012.)

 

The International Finance Corporation (IFC), a division of the World Bank, has also invested $7.5 million in the project, claiming it will “create employment, generate business opportunities for small businesses and promote sustainable development.” Since 2006, $68.6 millions have been invested by IFC in the Haitian private sector. Despite those investments, the per capita GDP in Haiti has seen very little improvement during that period. There is a fine line between slavery and an average $2 a day salary, which ousted president Jean Bertrand Aristide wanted to abolish prior to his overthrow in a US-French-Canadian sponsored Coup d’Etat. (La Société Financière Internationale (IFC) investit dans un projet hôtelier en Haiti pour supporter les efforts de reconstruction, IFC, June 30, 2010.)

 

“The good news” is that the project will create jobs for Haitians. The Oasis foundation has also created a program to train workers for the tourism industry. The project promoter, Jerry Tardieu told AP “the new hotels will help more people get out of the camps by giving them jobs to pay for rent on homes being rehabilitated by government and non-profit organizations.” He says 600 people have been employed for the hotel’s construction and once open and running, 250 to 300 new jobs will be created. On top of the $2 million invested in the hotel, a modest grant of $264,000 goes to the “Oasis Hotel’s nonprofit arm, the Oasis Foundation […] bolstering the hospitality sector by reopening l’École Hôtelière Haitienne (the Haiti Hotel School) […](Clinton Bush Haiti Fund, Programs: Oasis). Basically those funds are used to make comfortable hotel rooms, lounges and cafes for foreigners and “train Haitians to serve them ” in a congenial five star environment.

 

While, Haiti was lacking in hotel rooms in the wake of the earthquake and job creation is a key to poverty reduction, a majority of the population still live in makeshift shelters of cardboard, scrap metal and old bed sheets. People struggle to have water to drink and food on their table — and in many cases they do not have a table. Meanwhile, the construction of luxury hotels for foreigners is a number one priority, in comparison to “housing for the locals”.

Tourism Minister Stephanie B. Villedrouin “said all of those [850] hotel rooms [destroyed in the earthquake] will have been replaced by the end of the year […] Villedrouin said Port-au-Prince officially has a 60 percent occupancy rate but many of the hotels are too rustic for international travelers [including the NGO, World Bank and USAID staff on mission to Haiti].”(AP, op cit, emphasis added)

 

The “international travelers” are the unspoken victims of rudimentary and rustic hotel accomodation when on mission to Haiti, according to Mariott’s executive Alejandro Acevedo. “Marriott International, …is building a $45 million, 174-room hotel [in Haiti] in partnership with mobile phone company Digicel Group.” Marriott’s Acevedo complained that  “even he had to share a room with his boss on a recent visit because of the dearth of hotel space.”

Camp near Royal Oasis (AP Photo/Ramon Espinosa)

Meanwhile, most Haitians live in overcrowded camps such as Champ de Mars camp in Port-au-Prince, “densely packed with shacks made from bed sheets, tarpaulin and scrap metal, which provide flimsy shelter for some 17,000 people.” Forced evictions also take place regularly, according to AlertNet. (

Anastasia Moloney, Haiti’s homeless face housing lottery, AlertNet, February 23, 2012.) 
Champ de Mars camp. Photo: 
Haiti Press Network
The AP report adds that the International Federation of Red Cross and Red Crescent Societies (IFRC) bought land for $10.5 million and are also thinking of building a hotel: “The money came from donations raised by national Red Cross agencies for quake recovery, causing some to wonder if the money would be better used to house displaced people rather than aid workers.” (AP, op. cit, emphasis added).
Where did the money come from? Where did that money go?
Millions of people in the US, Canada and Western Europe donated part of their savings to their local Red Cross, which was then channeled to the IFRC, the world’s largest humanitarian umbrella organization. The IFRC claims to be “providing assistance without discrimination as to nationality, race, religious beliefs, class or political opinions.” (See 
IFRC website, emphasis added)
This land purchase by IFRC not only violates its humantiarian mandate but also the trust of its constituent Red Cross and Red Crescent organizations worldwide. Red Cross donations should have gone supporting IFRC’s mandate with regard to “shelter recovery and settlement planning”, in a post-disaster environment as clearly stated on the 
IFC website:

“Most people who have lost their homes through a disaster want to repair or rebuilt their homes as soon as possible. Many start the reconstruction process immediately after a disaster, whenever circumstances and resources permit. Shelter assistance provided by the International Federation of Red Cross and Red Crescent Societies (IFRC) recognises this, and where appropriate prioritises the provision of materials, tools, cash and technical assistance to support the process.” (emphasis added)

According to the AP report:  “Signs of Haiti‘s comeback can also be seen in the 105-room Best Western hotel being built within blocks of shanty-covered hillsides.”  The five star Best Western project is worth $15.7 million and is located in the plush city of Petionville. The “firstUS hotel in Haiti” is funded by local investors but will be managed by a Dallas firm and is expected to create 150 jobs. (Ibid.)

 

While several hotels are being built to provide “room and board” for potential foreign investors, very few homes are being built for locals and “the vast majority of construction has been temporary shelters with a life span between two, maximum five years”, according to Gerardo Ducos from Amnesty International. (AlertNet, op. cit.)

In order to shut down the Champ de Mars camp, which would be tantamount to the expulsion of more than 17,000 people, a controversial Haitian government program funded by Canada has been offering 500$ to dwellers who leave and find a home elsewhere. In practice this project leads to the de facto expropriation of slum dwellers in high value central downtown area of Port-au-Prince. While the amount is enough to pay the rent for a year, Ducos wonders: “What happens to the people when their rent money runs out in a year?” (Ibid.).

Will there be enough jobs for them in the hotel industry?
Will the salaries be high enough to pay the rent?
A lot of unanswered questions remain. 

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